New partnership aims to launch employer bundled payment programs
The National Alliance of Healthcare Purchaser Coalitions, a nonprofit network of business coalitions that includes more than 12,000 purchasers covering 45 million Americans, is partnering with Remedy Partners to create bundled payment programs.
The initiative is looking to build a national platform of episode-based payment and benefit design for employers to test over the next year.
Michael Thompson, CEO of the coalition, said the purchasers are looking to take advantage of Remedy Partners’ bundled payment knowledge. The goal is to create risk-based arrangements that employers can replicate.
Employers are increasingly looking for ways to improve value, quality and care coordination and reduce healthcare costs. They are banding together in groups like the National Business Group on Health, Catalyst for Payment Reform and the Pacific Business Group on Health.
These groups are looking for ways to contract with providers that reward quality. The initiatives include accountable care organizations for an entire employee population and bundled payment carve-outs or Centers of Excellence.
Walmart is one major employer with a COE. The program provides care to employers in a value-based payment program. There are no out-of-pocket costs, and while patients may have to travel to receive care, the program covers all travel-related costs. Walmart is offering a COE for employers in need of spinal and joint replacement surgery.
This trend will likely intensify in the coming years. A 2017 Willis Towers Watson report said employers expect healthcare costs will increase 5.5% this year after a 4.6% increase in 2017. In response, employers in the survey said they’re increasing cost-containment strategies.
Another recent Willis Towers Watson survey found that only 6% of employers contract directly with providers now, but 22% are considering it for 2019.
Thompson sees potential in such efforts. “Employer-led bundled payment can truly bring about the change required in the broken healthcare market. Working through our regional and national network of member coalitions can enable faster and more seamless execution of episode of care payment models across the country,” he said.
Rising employee medical costs are what drove Amazon, J.P. Morgan and Berkshire Hathaway to create a new healthcare company. It's not clear what exactly the company will do, but with such big names behind the joint venture and the recent announcement of Atul Gawande as CEO, it could certainly make waves.
"Hospitals, clinicians, and health plans will want to closely monitor the new company, especially if it shows any signs to eventually expand efforts beyond the founders' employee base," Rob Lazerow, managing director of research at Advisory Board, recently told Healthcare Dive. “The sophistication of these companies, their significant financial resources and their ability to disrupt established markets is clear.”
Healthcare purchasers aren't waiting around to follow Amazon’s lead, as this new partnership shows. Employers are hoping that through collaboration they will figure out ways to improve care and bend the cost curve.